Fingrid will not hand over decision-making power in Nordic cooperation – joint development of the electricity market is important

Today, 15.9., Fingrid submitted its response to a proposal made by the Swedish and Norwegian transmission system operators in June regarding a new model for balancing electricity system production and consumption. The proposal presents a model for balancing and decision-making. Fingrid cannot approve a proposal that conflicts with the energy policy goals of Finland and the EU and contains an illegal decision-making model. During the past weeks, representatives of Finland, Denmark, Norway and Sweden have continued the negotiations that began in June, but the Swedish and Norwegian transmission system operators have not withdrawn their proposal. Fingrid is prepared to develop new rules for electricity markets in which production and consumption are balanced in accordance with European Union legislation.

The decision-making model proposed by Norway and Sweden is illegal

On 6 September and earlier in June, Fingrid stated that the Swedish transmission system operator Svenska Kraftnät and the Norwegian transmission system operator Statnett are proposing a new model for the balancing of Nordic electricity system production and consumption. The proposal includes a decision-making model in which the Swedish and Norwegian transmission system operators would have the power to decide on electricity system management and the related rules for balancing power and reserve markets in Finland and Denmark. Following this, the Swedish and Norwegian transmission system operators would be handling a central part of Finland's and Denmark’s electricity system operations. Energy authorities in the Nordic countries have stated that the proposed decision-making model conflicts with European Union legislation and the Finnish energy authority has also stated that it conflicts with Finnish legislation. Fingrid cannot approve an illegal proposal.

Fingrid invites all Nordic transmission system operators to cooperate on the development of a market-based model

Fingrid actively develops new rules for markets in which electricity production and consumption are balanced. It is Fingrid’s view that activities must be developed in equal cooperation among the transmission system operators. Fingrid also believes it is important to include customers, market actors and the authorities in the development work. Any new solutions must promote the electricity markets, safeguard cost-effective system security and meet the requirements that European Union legislation sets for the use of transmission grids and balancing.

“We consider it important for transmission system operator cooperation to be based on equality, trust and solidarity. The cooperation must create the prerequisites for effectively functioning electricity markets,” says Jukka Ruusunen, President and CEO of Fingrid. Fingrid is willing to develop Nordic transmission system operator cooperation on the basis of these principles.

In accordance with the requirements and goals of the European Union’s new legislation, Fingrid invites Nordic transmission system operators to develop balancing in cooperation with each other.

Electricity market development: Fingrid has a statutory obligation to develop electricity market activities. The aim is to promote the uniformity of European electricity markets by ensuring that transmission connections between countries are available to market operators as efficiently as possible. Market codes create harmonised operating practices for cross-border trade in long- and short-term electricity products and reserves.

Reserve markets: Reserve markets mean markets maintained by Fingrid for electricity system reserves to balance electricity production and consumption in real time. For example, these include the Frequency Containment Reserve for Disturbances and the Frequency Containment Reserve for Normal operation markets.

Balancing power markets: Balancing power markets are used to regulate the balance between electricity production and consumption in nearly real time. Fingrid orders upper or lower balancing from the balancing power markets according to the electricity market need. Upper balancing means an increase in production or a decrease in consumption. Lower balancing means a decrease in production or an increase in consumption.

Balancing: Fingrid is responsible for maintaining the power balance between electricity production and consumption in Finland at all times. This is called balancing.